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Yahoo + AOL: Another Negotiation Ploy, Or a Grasp at Straws?

Honestly, I don’t know whether Yahoo seeking to acquire AOL, as reported by the Times of London, is just a way to jack up Microsoft’s unsolicited bid, or a real, last-ditch bid for independence.

I suspect the former, because here’s the reality: AOL doesn’t really do that much for Yahoo. As TechCrunch’s Mike Arrington points out, AOL doesn’t have any search technology, minuscule search query share, and no search ad platform, since it uses Google to serve search ads. So it won’t be clear to Yahoo shareholders how this adds enough value to the company to outweigh the 62% stock price premium in Microsoft’s offer. There were reports in late 2006 that Yahoo had approached Time Warner on acquiring AOL, but if it didn’t happen then, I’m not sure why it makes more sense now except as a desperation move on Yahoo’s part.